The long-awaited Republican double-secret probation plan to save America from affordable health insurance is out, and it's effectively the worst of all worlds and has basically no chance at all of passage even in the GOP-controlled House, let alone the Senate. Vox's Sarah Kliff:
The American Health Care Act was developed in conjunction with the White House and Senate Republicans. Two big questions — how many people it will cover and how much it will cost — are still unresolved: It will likely cover fewer people than the Affordable Care Act currently does, but we don’t know how many. And the Congressional Budget Office has not yet scored the legislation, so its price tag is unknown.
But what we can say for sure is this:
- Some of Obamacare’s signature features are gone immediately, such as the tax on people who don’t purchase health care. Other protections, including the ban on discriminating people with pre-existing conditions and the provision that allows young adults to stay on their parents’ plan through age 26, would survive.
- The plan maintains the Medicaid expansion — for now. The Affordable Care Act expanded Medicaid to cover millions of low-income Americans. And, in a big shift from previous drafts of the legislation, which ended Medicaid expansion immediately, this bill would continue to that coverage expansion through January 1, 2020. At that point, enrollment would “freeze,” and legislators expect enrollees would drop out of the program as their incomes change.
- The replacement plan benefits people who are healthy and high-income, and disadvantages those who are sicker and lower-income. The replacement plan would make several changes to what health insurers can charge enrollees who purchase insurance on the individual market, as well as changing what benefits their plans must cover. In aggregate, these changes could be advantageous to younger and healthier enrollees who want skimpier (and cheaper) benefit packages. But they could be costly for older and sicker Obamacare enrollees, who rely on the law’s current requirements.
- The bill looks a lot more like Obamacare than previous drafts. A curious thing has happened to the Republican replacement plan as it has evolved through multiple drafts: it has begun to look more and more like Obamacare itself. The bill keeps some key features of Obamacare, like giving more help to lower-income Americans and the Medicaid expansion, around in a scaled-back form. This speaks to how entrenched the health care law has become since its enactment 7 years ago, and how difficult it will be for the GOP to repeal it entirely.
In other words, the legislation A) scraps subsidies for refundable tax credits, which Republicans hate anyway and won't help people actually pay for health insurance, because B) the legislation also gets rid of the individual mandate, which will drive costs up and C) also gets rid of a lot of other taxes that actually helped pay for Obamacare but D) it keeps the Medicaid expansion through 2020 but then it turns around and E) scraps those in three years and turns Medicaid into a per-capita block grant.
And it gets worse. In short, the plan is a certified disaster. LA Times' Michael Hilzik:
Reporters and experts will be poring over the new draft for days, but here are some key elements gleaned from a first reading. Further examination undoubtedly will unearth more issues with the bill. The chances are almost nil that closer examination will find much, if anything, good about it.
The proposal defunds Planned Parenthood. No federal funding can be made, either directly or indirectly, by Medicaid to a healthcare organization that “provides for abortions,” other than those done in cases of rape or incest or to save the life of the mother. That’s Planned Parenthood. It’s proper to note that Planned Parenthood doesn’t use federal funds to pay for abortions, as that’s already against the law. This measure shuts down funding for the organization just because it uses other funds to cover those procedures.
The bill effectively shuts down private health insurance coverage for abortion. According to a House Ways and Means Committee digest, the measure forbids spending federal tax subsidies on health plans that include coverage of abortion, even if the customer doesn’t get an abortion. This would dramatically shrink working Americans’ access to insurance-covered abortions, or would lead to insurers dropping abortion coverage from their plans, or both. Customers could buy separate policies to cover abortions, but couldn’t use the federal subsidy to help pay for them. Insurers likely would charge hugely discouraging premiums for such policies, as the market for them would be tiny.
The individual and employer mandates are eliminated. They’re not repealed exactly, but the penalties are repealed, which amounts to the same thing. Without a requirement that individuals carry health insurance, the insurance markets are almost certain to collapse. The repeal is retroactive back to the beginning of 2016, but the real problem is in the market starting this year. Individuals would be able to drop their coverage immediately, which will wreak havoc with the market starting right now. Aetna’s chairman and chief executive, Mark Bertolini, said recently that the individual market was entering a “death spiral” in which healthier customers dropped coverage, leaving sicker customers who know they need insurance facing an ever-increasing rates. This provision will do much to guarantee that will happen.
Essential health benefit rules are repealed. As of Dec. 31, 2019, ACA rules that required qualified health plans to provide hospitalization, maternity care, mental health services and other benefits would be sunsetted at the federal level. States would have the authority to set them instead. The impact on private, non-Medicaid plans would therefore vary by state. If a state removes maternity benefits, for example, that’s likely to make maternity coverage, among other services, immensely expensive, if available at all.
Income-based premium subsidies would be replaced by age-based subsidies, which will hurt working-class families in many states. Under the ACA, subsidies to help individual buyers afford premiums and (for poorer households) deductibles and co-pays were based on household income. The GOP measure will base them on the buyer’s age, instead, with older buyers receiving more help than younger. The GOP plan limits subsidies to $4,000 per individual; under the ACA, which also keys subsidies to the cost of benchmark insurance plans in the buyer’s home market, the subsidies theoretically could be several times higher. No family could receive more than $14,000 in subsidies, and no more than five family members could be eligible for subsidies.
And let's keep in mind that the House GOP plans to rush this through starting this week without a Congressional Budget Office score whatsoever (we'll get one eventually but still.) It's a horrific bill and its fate appears to be to die screaming, but this is what the Republicans want to do in order to effectively give tax cuts to the wealthy and to corporations: pass a health insurance bill that will do lasting harm to tens of millions of Americans.
This bill is a mess, period. And this has nothing to do with Trump, this is the GOP in Congress being awful on their own merits. How bad is this legislation?
Even our old friend Avik Roy hates it.
The American Health Care Act repeals nearly all of Obamacare’s taxes, save the postponement of the Cadillac tax. But Obamacare’s tax hikes comprised about 60 percent of its funding for the law’s coverage expansion. So the $2 trillion question is: does the AHCA explode the deficit, or is it relying on steep Medicaid cuts to keep the deficit in line? We won’t know until the CBO scores the bill.
But, remarkably, House GOP leadership plans to move forward with marking up the bill on Wednesday without even having the CBO score available. It’s not clear why they’re proceeding without a score, but it means that members of the House Energy & Commerce and Ways & Means Committees will not have the information they need to make informed decisions about how best to revise the bill.
The CBO is likely to score the AHCA as covering around 20 million fewer Americans than Obamacare. There are flaws in the way the CBO models health reform legislation, but the AHCA itself contains enough flaws that there can be little doubt that the plan will price millions out of the health insurance market.
Expanding subsidies for high earners, and cutting health coverage off from the working poor: it sounds like a left-wing caricature of mustache-twirling, top-hatted Republican fat cats. But not today.
Let that one sink in for a while. This might actually be the worst possible version of the GOP Obamacare replacement. And the GOP knows it.